- Cargojet (CJT) has revealed a C$350 million bought deal equity offering with a syndicate of underwriters
- With the funds, the company is planning to expand its domestic, U.S. and international operations
- Funding will be used to acquire Boeing 767 and 777 freighter aircrafts
- The company sees growth opportunity with international passenger flights still restricted because of the pandemic
- Cargojet is trading steady at C$218.00 per share
Cargojet (CJT) has revealed a C$350 million bought deal equity offering with a syndicate of underwriters.
The underwriters include Scotiabank, CIBC Capital Markets, RBC Capital Markets, J.P. Morgan Securities Canada Inc., Morgan Stanley Canada Limited and BMO Capital Markets.
The company plans to use a portion of the net proceeds to fund domestic growth.
The COVID-19 pandemic increased demand for the company’s domestic air cargo service because of a dramatic increase in e-commerce activity.
Cargojet intends to acquire five Boeing 767 freighter aircraft. The company also plans to invest in a new hanger and other infrastructure on the ground.
The moves will increase its cargo capacity as it anticipates higher e-commerce volume driven by the ongoing pandemic and expects to establish a higher baseline going forward.
The company has also seen increased demand for its international services. It points to both U.S. and international growth opportunities as global supply chains evolve rapidly, due in part to a continued reduction of passenger aircraft of international routes.
Hoping to capitalize on potential strategic investments in the U.S., the company intends to use a portion of the net proceeds of the offering for the acquisition of two long-range Boeing 777 freighter aircraft for international routes for delivery in 2023.
The company completed the year experiencing record volumes during the peak season, consistent with previously disclosed expectations, and delivered approximately 99 per cent on time performance.
It also plans to use the money to discharge finance leases, including associated balloon payments, on six aircraft maturing in fiscal 2021 and fully pay down outstanding revolver balances.
Based in Mississauga, Ontario, Cargojet is Canada’s leading provider of time sensitive premium air cargo services to all major cities across North America. The company’s base of operations is located at John C. Munro Hamilton International Airport.
Cargojet is trading steady at $218.00 per share at 3:17pm EST on January 12.